BOJ debated near‑term rate hike at April meeting, opening door to June move
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
TOKYO, May 12 : Some Bank of Japan policymakers argued in April for raising rates soon, with one flagging the chance of a June move, highlighting a growing hawkish shift on the board as an oil shock from the Iran war raised pressure for near-term tightening.
The benchmark 10-year Japanese government bond yield climbed to a 29-year high on Tuesday after a summary of opinions from last month's meeting revealed an increasingly hawkish tone.
"It is quite possible the BOJ will raise interest rates from the next meeting onward, even if the future course of the Middle East conflict remains unclear," one board member was quoted as saying in the summary.
"While there is no need to take hasty action at this point, the BOJ should raise rates soon barring evident signs of an economic slowdown," another opinion showed.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
With the BOJ's policy rate still distant from levels deemed neutral to the economy, the BOJ must raise rates at intervals of a few months, and accelerate the pace of hikes "without hesitation" if inflationary risks rise, a third opinion showed.
The remarks heighten the chance the central bank will raise its policy rate at its next policy meeting on June 15-16.
At the April 27-28 meeting, the BOJ kept its short-term policy rate steady at 0.75 per cent but a hawkish split on the board underscored mounting concern over inflationary pressures from the Middle East conflict.
Three of the nine board members pushed for an interest-rate hike, a proposal that was rejected but did lead to a sharp upgrade in the bank's inflation forecasts.
Many BOJ policymakers said the Iran war was intensifying inflation pressures, raising the risk of second-round effects and bringing forward the timing for underlying inflation to reach 2 per cent, the summary showed.
"With the outlook for prices being revised significantly upward, uncertainty regarding the situation in the Middle East remains high, and all scenarios point to further upside risks to prices," one member was quoted as saying.
"Moreover, supply-side constraints, if they materialize, will exert extremely strong upward pressure on prices," the member said.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app